hackingbear writes: The Time magazine reports, in what is supposed to be a land of unlimited cheap labor — a nation of 1.3 billion people, whose extraordinary 20-year economic rise has been built first and foremost on the backs of low-priced workers — the game has changed. In the past decade, real wages for manufacturing workers in China have grown nearly 12% per year. The hourly cost advantage, while still significant [comparing to the West], is shrinking rapidly. The changing economics of Made in China will benefit both the rich and poor world. Countries like Cambodia, Laos, India and Vietnam are picking up some of the cheapest labor manufacturing left by the Chinese. And there is already evidence of at least the beginning of a shift in manufacturing operations returning to the U.S. Perhaps we will soon stop picking at "Made in China" but instead complaining "Made in Vietnam/Cambodia", while serving the flood of Chinese tourists stocking up brand-name merchandises on US tours and Chinese students paying high tuitions to our cash-strapped universities.

The real problem with the price of Chinese goods is they artificially link their currency with the American dollar, which keeps their cost stable despite a huge trade imbalance.

But it's not free. It's exactly that sort of thing that leads to the massive domestic inflation (food prices doubling in two years, that sort of thing) that China has been experiencing. You can't keep the invisible hand at bay for very long no matter what you do.